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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15328
Experience:  15years with H & R Block. Divisional leader, Instructor
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Customer Question

I'm a retired teacher from Texas, who moved to Louisiana, who has a State income tax. Is it legal for the State of Louisiana to tax my out-of-state Teacher Retirement Annuity ? Texas does not have a state income tax. I checked the refused to hear our case because our paper work was 3 days after the 60 day alloted time. I was never able to argue R.S.11:704. While leaving Baton Rouge, LA, an attorney for the state told us there was a recent US Constitutional Ruling that over-ruled Louisiana's taxing out-of-state teacher retirement systems, if that state (Texas) does not have a state income tax. . .We've done all the reasearch for LA exclusions, consulted CPA's, but not an attorney. Would it be possible for you to find that Constitutional ruling that supports our contention that our monies earned in Texas is not subject to the LA income tax. Two attorneys have mentioned this ruling to us, but we were not their clients. . . so. . .Please help if you can. . .If you find the ruling, do we have to file a suit in a federal court against the state of Louisiana. . .What would be out best move if you find that ruling, since we have not paid state income tax to LA in four years. . .Thanks
Submitted: 6 years ago.
Category: Tax
Expert:  Robin D. replied 6 years ago.

Hello and thank you for using Just Answer.

LA does indeed allow a retirement exclusion for retired teachers but only those that have retired from LA schools.

I think you are referring to Public Law 104-95 (P.L. 104-95). This law prevents any state from taxing income from certain pensions and deferred compensation plans paid to individuals who are not residents or domiciliaries of that state. Louisiana already exempts much of the pension income paid to non-residents covered by P.L. 104-95.

The Texas Teacher's Retirement is not a part of the ERiSA rules covering retirement and pension.

In short you are a resident of LA and are subject to the taxing laws of LA. A plan that distributes benefits to participants in another state that requires withholding does not have to go to the trouble of establishing withholding procedures to satisfy a state tax law, but that does not relieve the taxpayer in the resident state of their tax liability for the income.

States are generally free from federal control in deciding how to tax pensions, but some limits apply. State tax policy cannot discriminate against federal civil service pensions. Ten states exclude all federal, state and local pension income from taxation. These include Alabama, Hawaii, Illinois, Kansas, Louisiana, Massachusetts, Michigan, Mississippi, New York and Pennsylvania. Among these 10 states, only Kansas taxes any Social Security income, but only to the extent it is subject to federal taxation. Most in-state government pensions are taxed the same as out-of-state government pensions. However, Arizona, Idaho, Kansas, Louisiana, New York, and Oklahoma provide greater tax relief plans than they do for out-of-state government pension plans.


I know this did not give you the answer you were hoping for but as a resident of LA you are now under their taxing regulations.

I hope this information is useful,

Customer: replied 6 years ago.
When I formed my question, yesterday, Nov. 10, I was under the assumption that the question would be answered by a tax attorney and not a representative from H&R Block, with whom we have consulted before now. I feel certain you know about taxes, but this is a ruling from the Supreme Court. There were two attorneys in LA that defenitively said there was a Supreme Court ruling that a State with a state income tax could not tax Teachers' Retirement coming in from another state. What I was hoping to find out was about the "ruling" and if it does exist, does it supercede LA state income tax law. I believe, after reading your answer, you are talking about public law. I am looking for Supreme Court rulings and their restrictions on state income tax laws. Thank you
Customer: replied 6 years ago.
Please be informed that I have received another answer from the FindLaw. . .Tax_Counsel. . .which directs its answer directly to my question. . .I an unable, due to their "policy" restraits to reproduce anything they send to me. . .Thank you very much for your help. . .But it is no longer needed. gorilla_team